From El Salvador to Honduras, why authoritarians gain from USAID cuts
| San Salvador, El Salvador
On the face of it, the USAID money that Kara Wilson García was promised last year for Project RED, her child care-focused nongovernmental organization in El Salvador, had little to do with democracy. She spends most of her time zipping between family homes and fundraising events working to strengthen the country’s child protection system.
But she was aiming to specifically serve the children of parents who are among the 87,000 arrested under President Nayib Bukele’s “state of exception.” The crackdown, which has seen homicides plummet since launching in 2022, has simultaneously left thousands of children and adolescents forcibly abandoned by imprisoned caregivers.
The $50,000 U.S. commitment last year to Ms. Wilson’s pilot project evaporated after the Jan. 20 announcement of a freeze on the U.S. Agency for International Development.
Why We Wrote This
USAID cuts have hurt international development work. But in Central America they’re also hampering civil society groups dedicated to preserving democracy.
Across Central America, civil society organizations like Ms. Wilson’s are cutting staff and programming, and in some cases closing their doors. It’s not simply a threat to the lives of the direct beneficiaries of services around access to water, food security, or citizen journalism. In a region overwhelmed by high homicide rates and corruption, many organizations that are losing funding are also losing key footing as the last line of defense for democratic values. As some governments in the region move away from democracy, civil society checks on their power are crumbling in real time.
And in the case of El Salvador, the U.S. decision to halt its support for NGOs abroad by cutting USAID funds may have emboldened the government to take its own extreme steps toward curtailing civil society. On May 20, El Salvador’s Legislative Assembly passed a new “foreign agents” law that imposes a 30% tax on all individuals and organizations receiving foreign funds.
The withdrawal of USAID funding “leaves a lot of very important democracy work much more vulnerable,” says Enrique Roig, former deputy assistant secretary in the U.S. State Department’s Bureau of Democracy, Human Rights, and Labor. USAID has long supported organizations that promote transparency and accountability, he says, and these cuts work “to the delight of some autocrats in the region, like Bukele, who don’t want anybody shining a light on potential issues of corruption, don’t want any criticism of their policies.”
Who was USAID for?
Four of seven Central American countries sit at the bottom half of the Global State of Democracy Initiative, an index of civil liberties measured in 154 nations. Nicaragua ranks 143rd, and not far behind are El Salvador (94th), Honduras (91st), and Guatemala (83rd) – all of which have witnessed recent democratic backslides.
The USAID cuts hit Central America immediately.
In Honduras, considered the deadliest country in the world for environmental activists, the Forest Conservation Institute lost a project scheduled to start in March. Domestic electoral observation work by churches and universities in Honduras have been suspended due to the USAID cuts as well, according to the Washington Office on Latin America, which in April conducted an informal survey of 21 partner organizations across Central America. WOLA found 70% of local organizations had to cut staff, half reported a “serious” impact on their budget, and 25% reported a “very serious” impact on their budget.
In El Salvador, 97% of USAID funding went to projects supporting issues like improving access to clean water, halting illegal migration, and training security forces. In Guatemala, Catholic Relief Services and Save The Children have been the two biggest recipients of USAID funds over the past 25 years.
Nicaraguan journalists, exiled in Costa Rica because of the dictatorship at home, launched a crowdfunding campaign following the U.S. cuts. “We have never had to juggle so many challenges to continue our reporting as we have in the past three months,” the journalists behind the online news site Divergentes said in an op-ed published in El País in March.
USAID supports diverse and sometimes critical services in the region. But the Trump administration has dismissed their work as that of ideological activists. “USAID has been run by a bunch of radical lunatics and we’re getting them out,” President Donald Trump announced on Feb. 3.
Secretary of State Marco Rubio turned that rhetoric into policy when he announced in a post on X March 10 the cancellation of 83% of USAID programs. He said the affected contracts “spent tens of billions of dollars in ways that did not serve, (and in some cases even harmed), the core national interests of the United States.”
The White House underscored specific examples of how the funds were spent inappropriately: “Just some taken at random,” President Trump said on Feb. 19, “$2 million for sex change operations in Guatemala.”
The Guatemalan organization that received that grant tells a different story.
“The power of disinformation”
In September 2024, the right-wing news outlet The Daily Caller published an article under the headline “Feds Dump Millions in One Latin American Country To Fund Sex Changes, LGBT Activism.” The story highlighted a $2 million grant to Asociación Lambda, an LGBTQ+ organization in Guatemala, for a project that was to be implemented from April 2024 to 2027.
The staff at Lambda saw the story and moved on, not giving it much thought. But months later on Feb. 3, when an official White House account shared it on social media, it sparked an onslaught of online harassment, according to Diego Lima, coordinator of the National Human Rights Observatory at Lambda.
“No doctor or specialist in Guatemala performs sex change operations,” Mr. Lima says. “That’s the power of disinformation.”
While Lambda acted as an umbrella organization for the project, handling the financial responsibilities of the USAID grant, Trans-Fromacíon, a transgender men’s collective, was in charge of project logistics.
The project’s objective was to provide legal advice and psychological counseling, says Mr. Lima. “There was no hormone treatment, no surgical procedures.” U.S. federal records show only 25% of the grant was disbursed before funding was cut.
Organizations like Lambda do the work the state fails to do, using USAID money for everything from nutrition to Indigenous rights, Mr. Lima says. They “invested in socially excluded populations that the state doesn’t care to invest in.”
Due to the U.S. funding cuts, the number of people Lambda provides psychological support to through this project fell from 200 to 20. Their ability to shelter members of the LGTBQ+ community dropped by 50%.
They’re now considering grants from Asian governments, Mr. Lima says.
New threats
Mr. Bukele has stood behind the Trump administration’s cuts. He posted on X in February, “The majority of these [USAID] funds are funneled into opposition groups, NGOs with political agendas, and destabilizing movements.”
He added, “Cutting this so-called aid isn’t just beneficial for the United States; it’s also a big win for the rest of the world.”
Only 2.5% of USAID funds since 2019 went toward programs that supported media in El Salvador, according to an El Faro investigation, yet this industry was hit particularly hard. In a country roughly the size of Massachusetts, some 11 media organizations were affected by the cuts and 50 journalists lost their jobs, according to the Salvadoran Journalists’ Association.
On May 20, the Legislative Assembly passed a law that now requires NGOs in El Salvador to register under a newly created Foreign Agents Registry, which prohibits them from “carrying out activities for political purposes or others that subvert public order, threaten national security, or undermine social and political stability.” Any foreign funding of civil society will be taxed 30%.
Addressing legislators on May 20, the president of El Salvador’s Legislative Assembly said, “If you want to keep paying those sellout journalists to make up cartoonish stories, keep doing it.”
Mr. Roig, who also served as coordinator for USAID’s Central America Regional Security Initiative, says that combined with slowing global economic growth and “a lack of democratic governability ... the projections do not bode well” for Central America’s future.
